The table is tilted, the dice are loaded, the cards are marked, but the game goes on.

Corporate Colonialism: The Winners and Losers of Global “Free” Trade

“I think of globalisation as a light which shines brighter and brighter on a few people, and the rest are in darkness, wiped out.” Arundhati Roy

On February 12th of this year the presidents of Mexico, Colombia, Peru and Chile signed an agreement to eliminate tariffs on 92 percent of trade among their countries. The agreement is seen as vital in the economic integration of the four fastest-growing economies in Latin America, and a significant advance in their goal of working as a united trade partner with Asia.

At least that’s the official story, reported verbatim and with gushing enthusiasm by the mainstream financial and general press.

Mexican President Enrique Peña Nieto called the pact the “largest [Mexico] has signed since the Free Trade Agreement with the United States” or NAFTA. Chile’s Sebastián Piñera emphasized the alliance’s openness, saying it is “not against anybody, only in favor of increasing the quality of life in our countries.”

However, as Colombian president Juan Manuel Santos acknowledged, there will be “winners and losers” along the way. The winners will inevitably be the same as always: big industry, big agriculture and big finance, including, of course, big domestic players such as Mexico’s Cemex and and Chile’s Antofagasta. As for the losers, they will be the rest of society, in particular the poorest and most vulnerable.

Mexico’s experience following its signing of NAFTA is a perfect case in point. According to the Mexican left daily La Jornada, even the World Trade Organisation has now acknowledged that there have been much fewer gains for the poorest segments of society.

Mexico: Global Free Trade’s Poster Child

Post-NAFTA Mexico is as much a poster child of the potential macro-economic benefits of so-called “free trade” as it is of the micro-economic ravages it leaves in its wake. As El Observador Economico reports, the positives cannot be ignored:

Between 1993 and 1998 foreign investment in the country almost tripled.

The number of employees in industry more than doubled in the space of six years.

The total value of Mexico’s exports to the United States rose from 49.4 billion dollars in 1994 to 135 billion dollars in 2000.

Productivity increased by 47 percent between 1994 and 2001.

All of which, on the face of it, sounds impressive – enough to excite even the most impassive economist. But there is another, altogether bleaker side to the story – one, unfortunately, rarely told beyond Mexican borders:

The real value of the minimum wage plummeted by around 20 percent between 1993 and 2001.

Much of the new employment generated was in the assembly of imported component parts for re-export in semi-sweat shop facilities called Maquiladoras. The lure of the maquilas is low wages, a lack of environmental or labour regulations, low taxes, and few if any duties — the sort of conditions that are still hard to find in the more heavily regulated markets of Europe and the U.S. Products produced include apparel, electronic goods and auto parts.

The percentage of Mexicans living in outright poverty rose from 21 percent of the population in 1994 to 50 percent in 1998.

The exodus of campesinos to cities and the big corporate farms in the North of America and the US has accelerated: in the last 20 years millions of Mexican farmers have had to abandon their land.

A similar script has played out in Colombia, the United States’ most important client state ally in South America, whose latest bilateral trade agreement with the U.S. came into force on May 15th 2012.

“Amongst the few winners are businesses exporting garments into the US market who saw their trade increase by around 12 per cent between the first half of 2012 and 2013,” writes Andy Higginbotham, a secretary of the Colombia Solidarity Campaign and principal lecturer at Kingston University, London. “Over the same period agriculture exports to the US increased marginally, from $46 million to $48 million, but agricultural imports from the US more than doubled, from $177 million to $352 million.”

One of the conditions that former US President Bush and then President Obama put on passing the trade agreement is that Colombia would pass a law to privatise seeds. The government was more than happy to oblige, decreeing that only certified seeds could be sown.

The problem for Colombian farmers is that only big capital – i.e. multinationals – can afford the certification process. As a result, only their seeds can be grown. In the last year thousands of peasant rice farmers have had their seed stock destroyed by police and government officials (see images in this documentary, Decree 170, from 02’30).

When the smallholders protested, the police hit back with brutal force, killing two protesters and injuring 13. Which makes you wonder: just how free can free trade be if it must be enforced at the barrel of a gun?

Starving the World for Profit and Power

As is becoming increasingly evident, the new generation of bilateral and multilateral trade talks – in particular the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP), which countries on both sides of the planet’s two largest oceans seem desperate to sign – have little to do with promoting free trade.

What they’re really about is extending the power, control and wealth of the world’s largest corporations, by providing them unfettered access to countries’ markets and resources.

Whatever some might say, this is not a conspiracy theory; it’s conspiracy fact. Matt Stoller – who writes for Salon and has contributed to Politico, Alternet, Salon, The Nation and Reuters — has used the Congressional Record to show that “free trade” pacts were always about weakening nation-states to promote rule by multinationals.

Liberal internationalists, including people like Chase CEO David Rockefeller and former Undersecretary of State and an architect of 1960s American trade policies George Ball, began pressing for reductions in non-tariff barriers, which they perceived as the next set of trade impediments to pull down…

… [In a 1967 hearing] before a legion of impressive senators and congressmen Ball attacks the very notion of sovereignty. He goes after the idea that “business decisions” could be “frustrated by a multiplicity of different restrictions by relatively small nation states that are based on parochial considerations,” and lauds the multinational corporation as the most perfect structure devised for the benefit of mankind. He also foreshadows our modern world by suggesting that commercial, monetary, and antitrust policies should just be and will inevitably be handled by supranational organizations.

Now, decades later, Ball’s dystopian project is a whisker’s breath from completion. Through a whole gamut of complex political, legal and economic measures, including the imposition of brutally rigid copyright and intellectual property laws, some of the world’s biggest multinational companies are quite literally being gifted the planet and all that’s on it.

For the world’s biggest agribusinesses, free trade provides the perfect pretext to consolidate their hold over the global food chain. Already 75 percent of the global commercial seed market is controlled by six mega-corporations — Monsanto, DuPont, Syngenta, Bayer, Dow, and BASF. The result is that basic crop seeds, which for millenia have been a common good to be shared out and improved among small communities of farmers, now belong firmly in the private hands of U.S. and European conglomerates.

According to Alejandro de Coss, a Mexican internationalist who teaches at the London School of Economics, the result is that large parts of rural Latin American are once again in the process of being colonised – no longer through the actual physical possession of the land, but rather through the seeds grown on it.

In Mexico, the result has been a huge exodus of campesinos from their own lands as well as a decline in the country’s crop diversity – particularly with regard to its staple crop, corn, which was first domesticated eight thousand years ago in the Mexican states of Puebla and Oaxaca.

The country remains the fourth largest corn producer in the world but its 22,000,000 ton annual yield pales in comparison to U.S. growers who, as a result of massive U.S. government subsidies, harvest around 300,000,000 tons each year, accounting for 70 per cent of the world’s maize supply – much of which are now genetically engineered varieties. The result is that a country that once boasted the greatest diversity in corn varieties is now dependent for its own staple crop on the highly unstable international markets, where food speculation is rifer then ever.

However, Mexico and Colombia are far from the only victims of this process. From India to Africa, Asia to South America, smallholders are finding it more and more difficult to plant their own seeds, extracted from the prime produce of last year’s harvest. They are also forbidden from reusing the certified seeds and are forced to take on unpayable debts to keep buying new seeds year in, year out.

In India, more than 100,000 farmers have taken their own life as a result of the ruthless drive to use the country as a testing ground for genetically modified crops — all made possible through a bilateral trade agreement between the Indian government and the U.S. All the while, countless tons of good quality crops, together with the thousands of years of human knowledge that went into their careful selection and improvement, have been destroyed.

In 1994, the late business magnate Sir James Goldsmith warned in an eerily prescient interview with Charlie Rose of the huge risks of exporting Western agricultural methods around the globe:

“If GATT [the predecessor to the World Trade Organisation] succeeds and were able to impose modern methods of agriculture worldwide so as to bring them to the levels, say, of Canada and Australia, 2 billion people out of 3.1 billion people would be uprooted from the land and chased into the towns… It would be a far greater disaster than any war.”

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3 thoughts on “Corporate Colonialism: The Winners and Losers of Global “Free” Trade”

I wasn’t aware of the agricultural effects of globalization on small farms. It seems odd to me, with so many people wanting to leave urban and suburban environments to return to the land that corporate farms and Big Ag continue to displace small farms.

News of North American farmers foregoing GMO seed and the resurgence of Farmers’ Markets and truly organic food are but oasis in the desert of corporate farming.

I lived some of the effects of NAFTA. I was working for a small aerospace supplier in Toronto in 1989 and 1990. This company was owned by two parent corporations, one in France and one in Canada. Once NAFTA was approved, Several companies owned by these multinationals either moved operations to Mexico or shuttered their Canadian operations.

The irony is that Central Planning and Control always fails when compared to localized market based planning and control.

Thanks, 7th Pillar, for your thoughtful comments. As you say, going local is the only way to bring back sanity and that oft paraded word, sustainability, to proceedings. But sanity and sustainability are the last things our central planning committees want.

[…] government and regulatory procedures than the U.S. agribusiness giant Monsanto. As I reported in Corporate Colonialism: The Winners and Losers of Global “Free” Trade, Monsanto is one of six big food transnationals that control over 70 percent of the world’s […]